Scenario 9.2
Shipments of Product X from a plant to a wholesaler are made in lots of 600. The wholesaler's average demand for X is 100 units per week. The lead time from the plant to the wholesaler is 4 weeks. The wholesaler pays for the shipments when they leave the plant.
-Refer to Scenario 9.2. What is the total of the wholesaler's current cycle plus pipeline inventories?

Question

Quizplus · Accepted Answer

The wholesaler's current cycle inventory is 100 units per week x 4 weeks lead time = 400 units. The pipeline inventory is the same as the shipment quantity, which is 600 units. Therefore, the total of the wholesaler's current cycle plus pipeline inventories is 400 units + 600 units = 1000 units.

Scenario 9.2 Shipments of Product X from a Plant to a Wholesaler